Standard Chartered Bank says the price of bitcoin could drop to $5,000 next year. The bank analyst explained that cryptocurrencies could fall further and more crypto businesses could “succumb to liquidity restrictions and investor withdrawals.”
Standard Chartered Bank’s $5,000 Bitcoin Scenario
Standard Chartered Bank released a note on Sunday titled “Financial Market Surprises of 2023.” The note outlines a number of possible scenarios that “we feel are undervalued by markets,” wrote Eric Robertsen, global head of research at Standard Chartered.
One scenario is for bitcoin price to drop to $5,000 next year, which would be about a 70% drop from BTC’s current price of around $17,000.
Yields are plunging with tech stocks, and while bitcoin selling is slowing, the damage has been done. More and more crypto businesses and exchanges find themselves with insufficient liquidity, leading to further bankruptcies and a collapse in investor confidence in digital assets.
The Standard Chartered analyst clarified that the extreme scenarios described “have a non-zero probability of occurring over the coming year, and… fall significantly outside the market consensus or our own views of base”.
While noting that cryptocurrencies could “fall further” and that more crypto firms could “succumb to liquidity restrictions and investor withdrawals,” Robertsen said gold could climb as much as 30% at $2,250 an ounce and once again become a safe haven. He described:
Gold’s resurgence in 2023 comes as equities resume their bear market and the correlation between stock and bond prices turns negative again.
Commenting on Standard Chartered Bank’s $5,000 bitcoin price outlook, gold bug and economist Peter Schiff reiterated his prediction that BTC still has a lot to fall. He tweeted on Monday:
Bitcoin has a downside risk of well over 70%. After such a drop, the bitcoin price will still be way too high, so $5,000 won’t even be close to the bottom.
Recently, veteran investor Mark Mobius said bitcoin could fall to $10,000 next year as the Federal Reserve continues to raise interest rates and tighten monetary policy.
However, some people are still optimistic about bitcoin price. Venture capitalist Tim Draper, for example, doubled his BTC price prediction to $250,000 by the middle of next year.
Do you think bitcoin will fall to $5,000 next year? Let us know in the comments section below.
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